FIN2601 ASSIGNMENT 1 2026 - DISTINCTION | DUE 16 APRIL 2026

FIN2601 ASSIGNMENT 1 2026 Question 1 Read the information provided and then answer the questions that follow. Indicate all the steps in your calculations – it is NOT enough to provide only a final answer. Transportation Hero is a diversified logistics and transportation holding company that operates through several subsidiaries offering services across the logistics value chain. The group has invested a total capital amount of R500 million across five subsidiaries. Each subsidiary operates in a different segment of the logistics industry and is exposed to varying levels of systematic risk due to differences in operational activities, demand sensitivity and competitive conditions. The level of systematic risk for each subsidiary is measured using beta coefficients. The investment amounts and beta values of the subsidiaries are presented as follows: Subsidiary Investment (R million) Beta Freight and cargo services 160 0,5 Warehousing and distribution 120 2,0 Courier and last-mile delivery services 80 4,0 Fleet management and vehicle leasing 80 1,0 Customs clearing and freight forwarding 60 3,0 The risk-free rate of return is 8%. The expected market return for the next period is uncertain and is described by the following probability distribution: Probability Market return 0,1 10%